China Property Weekly Digest

Transcription

1 (Issue No. 22) Refer to important disclosures at the end of this report DBS Group Research. Equity 9 May 217 Sales plunge due to fewer launches Following the interest rate hike in housing mortgage in Beijing, banks in Guangzhou and Nanning also raised interest rates for housing mortgage, as we had previously expected. In the first week of May (1-7), GFA sold in 36 cities dropped by 18.5% w-o-w with Tier I/II/III cities' changing by -8%/-3%/11%. GFA sold in those cities was down 13.2% y-o-y. New launches in ten Tier I&II cities were only half of those in the previous week. YTD GFA sold in 36 cities slid 12.4% y-o-y. Overall ASP was 2.9% lower than that for last week. ASPs in Tier I/II/III cities decreased by 4%/3%/3% respectively. Inventory level of key cities remained at 43 weeks; sellthrough rate of newly launched projects in Tier I & II cities decreased to 66%. Last week, Powerlong (1238 HK) and Shimao (813 HK) saw the highest growth in southbound shareholding while Greenland HK (337 HK) and Sino-Ocean (3377 HK) witnessed the largest declines. Inventory (no. of weeks of sales) of 16 cities* Jan-11 Mar-12 Jun-13 Inventory (no. of weeks) Aug-14 Nov-15 Jan weeks rolling avg New launches in 1 major cities and sell-through rate 25, 2, 15, 1, 5, 32W12 5W12 14W13 32W13 5W13 18W14 35W14 2W15 19W15 36W15 1W16 18W16 35W16 52W16 17W17 Total units launched (LHS) Sell-through rate (RHS) 6 mths average sell-through (RHS) Source: CREIS, Fang.com, DBS Vickers * Rolling 26 weeks inventory 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % HSI: 24,889 ANALYST Trista QIN trista_qin@hk.dbsvickers.com Carol WU carol_wu@hk.dbsvickers.com Danielle Wang, CFA danielle_wang@hk.dbsvickers.com Ken HE CFA, ken_he@hk.dbsvickers.com Andy YEE CFA, andy_yee@hk.dbsvickers.com Weekly sales performance of major cities (May 1 May 7) w-o-w YTD vs 216 YTD vs 215 Avg weekly GFA sold 18.5% 14.3% 1.6% ASP 2.9% 9.8% 2.3% Inventory (no. of weeks) vs same period 216 vs same period 215 YTD GFA sold 12.4% 28.2% YTD share price performance CC Land China South City SRE Sector avg: +21% Ying Li Minmetals First Sponsor Renhe Sino-Ocean Hopson Zhong An COLI SOHO Vanke HSI Index China Jinmao Greentown Poly HK Glorious MSCI China CR Land Yuexiu Shimao Small caps Mid caps China SCE BJ Cap Land CIFI BJ North Star KWG Yuzhou Greenland HK Large caps GZ R&F Longfor Lai Fung Yanlord COGO Kaisa Powerlong Sunac Evergrande Agile C Garden -2% % 2% 4% 6% 8% Source: Bloomberg Finance L.P., CREIS, Fang.com, DBS Vickers ed-ck / sa- AH

2 Share price performance YTD Share price performance w-o-w % changes of shareholding by southbound trading CC Land China South City SRE Ying Li Minmetals First Sponsor Renhe Sino-Ocean Hopson Zhong An COLI SOHO Vanke HSI Index China Jinmao Greentown Poly HK Glorious MSCI China CR Land Yuexiu Shimao Small caps Mid caps China SCE BJ Cap Land CIFI BJ North Star KWG Yuzhou Greenland HK Large caps GZ R&F Longfor Lai Fung Yanlord COGO Kaisa Powerlong Sunac Evergrande Agile C Garden Sector avg: +21% -2% % 2% 4% 6% 8% Daily trading volume (May 2 May 5) Greenland HK Sino-Ocean CR Land Kaisa GZ R&F Hopson Agile Yuexiu COGO Renhe COLI Poly HK SOHO Longfor KWG CIFI Evergrande China South City BJ North Star Yuzhou Greentown China SCE China Jinmao Sunac Vanke Country Garden Shimao Powerlong -25% -2% -15% -1% -5% % 5% 1% US$ mn COLI Evergrande CR Land C Garden Sunac GZ R&F Agile Vanke Longfor KWG Shimao Yanlord Sino-Ocean Yuzhou Yuexiu Poly HK Greentown CIFI SOHO China Jinmao China South City BJ Cap Land China SCE COGO Powerlong Greenland HK BJ North Star Hopson Glorious CC Land Renhe Ying Li Minmetals Zhong An Lai Fung SRE First Sponsor Source: Bloomberg Finance L.P, HKEx, DBS Vickers Page 2

3 Average weekly trading volume US$ mn COLI Evergrande CR Land C Garden Sunac Vanke GZ R&F Agile Longfor Shimao KWG Greentown Poly HK Yuexiu Sino-Ocean SOHO Yanlord China SCE Yuzhou BJ Cap Land COGO Greenland HK BJ North Star Ying Li Hopson CC Land Glorious Renhe Minmetals SRE Zhong An China South City CIFI First Sponsor Kaisa Lai Fung Powerlong YTD Source: Bloomberg Finance L.P, DBS Vickers New projects launched (May 1 May 7): 2 projects were launched in Major Tier I&II cities. 4 projects were launched in Wuhan Total of 5.7k units were launched in Major Tier I&II cities. Average sell-through rate for new launches decreased to 66% Unit Beijing Shanghai Shenzhen Guangzhou Wuhan Launches (LHS) Hangzhou Tianjin Chongqing Nanjing Chengdu Sell-through rate (RHS) 1% 8% 6% 4% 2% % 25, 2, 15, 1, 5, 32W12 5W12 14W13 32W13 5W13 18W14 35W14 2W15 19W15 36W15 1W16 18W16 35W16 52W16 17W17 Total units launched (LHS) Sell-through rate (RHS) 6 mths average sell-through (RHS) 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Page 3

4 Weekly sales performance of major cities Tier I cities Tier I cities: Weekly GFA sales of key cities Cit y GF A Last week ( sm) w-o-w y-o-y % change as compared to Avg of previous 4 weeks Avg 216 Avg 215 Avg 214 Avg 213 Avg 212 Beijing 86-29% -28% -28% -53% -61% -55% -65% -66% Shanghai % -14% 8% -37% -4% -16% -24% -4% Shenzhen 16 17% 268% 137% 31% -17% 37% 26% 5% Guangzhou 23-16% -31% 15% -15% 11% 45% 14% 11% Tier I total 686-8% -13% 33% -19% -27% 3% -12% -2% Tier I cities: Weekly ASP of key cities ASP % change as compared to Avg of City Last week (Rmb/sm) w-o-w y-o-y previous 4 weeks Avg 216 Avg 215 Avg 214 Avg 213 Avg 212 Beijing 38,16-15% 6% -11% 5% 41% 49% 62% 84% Shanghai 33,424 5% 42% 16% 26% 44% 77% 79% 114% Shenzhen 53,97 1% 6% % -1% 64% 129% 144% 189% Guangzhou 15,125-6% 1% -2% -8% % 2% 18% 26% Tier I total 35,134-4% 14% 1% 6% 37% 64% 76% 13% Tier I cities: YTD GFA sales of key cities Tier I cities: Avg ASP of key cities sm Yoy (%) RMB/sm Yoy (%) 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, Shanghai Beijing Guangzhou Shenzhen 217 (LHS) 216 (LHS) 2% 1% % -1% -2% -3% -4% -5% -6% -7% 6, 5, 4, 3, 2, 1, Beijing Shenzhen Shanghai Guangzhou 12% 1% 8% 6% 4% 2% % -2% -4% 217 avg (LHS) 216 avg (LHS) Yoy (RHS) Page 4

5 Tier II cities Tier II cities: Weekly GFA sales of key cities GF A % change as compared to Avg of Cit y Last week ( sm) w-o-w y-o-y previous 4 weeks Avg 216 Avg 215 Avg 214 Avg 213 Avg 212 Tianjin n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Hangzhou n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Suzhou 84-24% -38% -2% -5% -63% -47% -46% -64% Xiamen n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Changsha % -64% 18% -64% -48% -44% -53% -52% Ningbo % 1% -18% -2% 36% 67% 49% 75% Wuhan 537-2% -26% 2% -19% 9% 33% 43% 66% Chengdu % -27% -33% -37% -3% -33% -43% -36% Chongqing % 44% -13% 65% 9% 83% 78% 82% Qingdao 345 1% -2% 2% -12% 35% 94% 48% 99% Xi'an % -14% -71% -39% -22% -6% -9% 15% Nanjing % -16% 12% 6% 26% 93% 53% 98% Dalian 67-32% 1% -3% 6% 17% 52% 15% 5% Fuzhou 1-57% -84% -28% -81% -81% -77% -78% -79% Wuxi 44-42% -75% -36% -76% -63% -57% -54% -57% Shenyang % 11% -22% 19% 35% 44% 8% 59% Jinan % -38% -22% -46% -14% 23% 17% n.a. Nanchang 7 7% -41% -22% -5% -37% -34% -9% -12% Hefei n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Shijiazhuang n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Changchun n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Harbin n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Haikou n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Nanning 164-2% 2% -3% -19% 3% 49% 51% 13% Lanzhou n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Kunming n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Guiy ang n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Wenzhou % 32% -5% 26% 91% 122% 112% 295% Sany a n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Tier II total 3,684-3% -14% -11% -22% -1% 21% 11% 4% Tier II cities: Weekly ASP of key cities ASP % change as compared to Avg of City Last week (Rmb/sm) w-o-w y-o-y previous 4 weeks Avg 216 Avg 215 Avg 214 Avg 213 Avg 212 Tianjin n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Ningbo 16,22-1% 18% -12% 16% 21% n.a. n.a. n.a. Chongqing 9,183 % 38% 9% 25% 25% 22% 26% 36% Xi'an 7,717-14% 12% -2% 1% 9% % 6% 14% Wuxi n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Shenyang 7,755 4% 13% 3% 14% 22% 13% 11% 18% Lanzhou n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Sanya n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Tier II total 1,219-3% 2% -1% 16% 19% 12% 14% 23% Page 5

6 Tier II cities: YTD GFA sales of key cities sm 14,5 12,5 1,5 8,5 6,5 4,5 2,5 5 (1,5) Wuhan Chongqing Changsha Kunming Xian Qingdao Shenyang Changchun Nanjing Suzhou Chengdu Ningbo Dalian Nanchang Wuxi Hangzhou Wenzhou Fuzhou Sanya Nanning Haikou Changsha Yoy (%) 8% 6% 4% 2% % -2% -4% -6% -8% 217 (LHS) 216 (LHS) Yoy (RHS) Tier II cities: Avg ASP of key cities RMB/sm 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, Changsha Xian Chongqing Shenyang Shenyang Yoy (%) 4% 35% 3% 25% 2% 15% 1% 5% % 217 avg (LHS) 216 avg (LHS) Yoy (RHS) Page 6

7 Tier III cities Tier III cities: Weekly GFA sales of key cities GF A % change as compared to Avg of Cit y Last week ( sm) w-o-w y-o-y previous 4 weeks Avg 216 Avg 215 Avg 214 Avg 213 Avg 212 Dongguan % -1% -2% -35% -41% 5% -21% % Weifang n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Baotou 55-26% 1% -11% -17% -2% -1% 3% -22% Guilin n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Xuzhou 34 19% 1% -18% 17% 62% 87% 71% 134% Bengbu % 262% 125% 223% 576% 516% 418% 865% Yangzhou 98 24% 45% 34% 52% 113% 146% 73% 199% Huizhou 72-26% -33% -11% -28% 6% 41% 13% 15% Lianyungang % 62% 9% 76% 118% 156% 13% 147% Shantou 218 1% 399% 3% 256% 528% 19% 91% 154% Zhongshan n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Dandong n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. J iujiang n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Shaoguan 67 n.a. 99% 84% 84% 196% 247% 223% 337% Luzhou n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Nanchong n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Zhoushan 83 21% 255% 82% 199% 269% 411% 36% 585% Dongying 54-11% 29% -13% 46% 48% 63% 1% 1% Huaian % -32% 2% -34% -2% 27% 11% 33% Wuhu 7-1% -6% 7% -21% 52% 8% 65% 29% Guan n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. J iaozuo 23 5% 129% -6% 15% 25% 14% 12% 7% Zhaoqing 84-21% 41% -3% 64% 14% 27% 152% 154% Tier III total 1,846 11% 81% 21% 6% 137% 214% 156% 242% Tier III cities: Weekly ASP of key cities ASP % change as compared to Avg of City Last week (Rmb/sm) w-o-w y-o-y previous 4 weeks Avg 216 Avg 215 Avg 214 Avg 213 Avg 212 Dongguan n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Weifang n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Baotou 5,284-11% n.a. -4% 4% 2% 3% 3% 15% Bengbu n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Shantou 9,355 3% 24% 4% 14% 16% 16% 5% 32% Dandong n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Jiujiang n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Shaoguan 6,77 n.a. 5% 7% 35% 2% 16% 12% 15% Dongying n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Huaian 4,643 % 6% -6% 7% 11% 6% 6% 15% Jiaozuo n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Zhaoqing 6,325-2% 1% 2% 17% 21% 11% 5% 22% Tier III total 6,337-3% 12% % 15% 14% 11% 6% 2% Page 7

8 Tier III cities: YTD GFA sales of key cities sm 8,4 7,4 6,4 5,4 4,4 3,4 2,4 1,4 4 (6) Yoy (%) 25% 2% 15% 1% 5% % -5% -1% Xuzhou Wuhu Dongguan Lianyungang Shaoxing Huizhou Zhoushan Baotou Jiujiang Yangzhou Wuhu Bengbu Zhaoqing Shantou Shaoguan Huaian Dongying 217 (LHS) 216 (LHS) Yoy (RHS) Tier III cities: Avg ASP of key cities RMB/sm 15, Yoy (%) 25% 2% 1, 15% 5, 1% 5% % Shaoxing Jiujiang Zhaoqing Baotou Shaoguan 217 avg (LHS) 216 avg (LHS) Yoy (RHS) Page 8

9 Inventory level No. of weeks to digest inventory Avg = 43 Fuzhou Shenzhen Suzhou Hangzhou Dongying Zhoushan Beijing Huizhou Nanning Guangzhou Shanghai Ningbo Nanjing Trend: No. of weeks to digest inventory weeks Tier Tier Tier 2 Jan-11 Mar-12 Jun-13 Aug-14 Nov-15 Jan-17 Tier I average Tier II average Tier III average Notes: 1. Based on 26 weeks average sales 2. Only Huizhou, Jiujiang, Nanchong, Zhoushan and Dongying are included in Tier III cities Page 9

10 Share price performance and peer valuations Valuation comparison 3-mth daily Net Disc/ 9-May Mkt trading 12-m EPS gth PE PE Yield Yield ROE ROE Gearing P/Bk NAV (Prem) Price Cap value Recom target 17F 18F 17F 18F 17F 18F 17F 18F 1H16 1H16 to NAV Company Name Code HK$ US$bn US$m HK$ % % x x % % % % % x HK$ % Large cap China Overseas* 688 HK BUY (17) (4.2) Country Garden* 27 HK HOLD CR Land* 119 HK BUY (2) China V anke 'H'* 222 HK HOLD Evergrande* 3333 HK HOLD (1.7) Longfor* 96 HK BUY (1) Shimao Property* 813 HK HOLD 11.2 (11) Av erage Mid cap Agile Property* 3383 HK HOLD China South City*^^ 1668 HK FV n.a. 1.9 n.a COGO* 81 HK BUY China J inmao Hldgs* 817 HK HOLD Greentown 39 HK NR n.a Guangzhou R&F 2777 HK NR n.a Hopson Dev 754 HK NR n.a. (8) n.a. n.a n.a. n.a. KWG Property 1813 HK NR n.a. (1) Logan Property 338 HK NR n.a. (13) n.a. n.a. Poly (Hong Kong) 119 HK NR n.a Sino-Ocean Land* 3377 HK BUY Soho China* 41 HK HOLD 4.16 (67) Sunac China 1918 HK NR n.a. (3) n.a. n.a. Yanlord Land*^ YLLG SP BUY 2.21 (12) Yuexiu Property* 123 HK HOLD 1.23 (14) Average# Small cap BJ Cap Land 'H' 2868 HK NR n.a. (2) n.a. n.a. BJ North Star 'H' 588 HK NR n.a. 5 n.a. 7.5 n.a. 2.2 n.a. 6.6 n.a n.a. n.a. C C Land* 1224 HK Hold (79) (23.2) Central China* 832 HK HOLD China SCE 1966 HK NR n.a. (22) n.a. n.a. CIFI Holdings 884 HK NR n.a n.a. n.a. First Sponsor*^ FSG SP NR n.a n.a Glorious Property 845 HK NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a Hydoo Int'l 1396 HK NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a n.a. n.a. Kaisa Group 1638 HK NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Lai Fung* 1125 HK NR n.a. (73) n.a n.a Minmetals Land 23 HK NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. (14.9).4 n.a. n.a. Modern Land (China) 117 HK NR n.a n.a. n.a. Powerlong 1238 HK NR n.a. (14) n.a. n.a. Renhe Commercial 1387 HK NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a Greenland* 337 HK BUY n.a. 2.3 n.a SRE Group 127 HK NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a n.a. n.a. Sunshine 1 China 268 HK NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a n.a. n.a. Times Property 1233 HK NR n.a n.a. n.a. Wuzhou Int'l 1369 HK NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a n.a. n.a. Ying Li^ YINGLI SP NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a Yuzhou Properties 1628 HK NR n.a Zhong An 672 HK NR n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a n.a. n.a. Average** Average (Overall)@ ~ ^ Denominated in SGD for price ~ Simple average discount to NAV; Market cap weighted average NAV = 26% # Exclude Soho China ** Exclude Greenland, First Sponsor & Lai Exclude Soho China, Greenland, First Sponsor & Lai Fung ^^ FY15: 16F; FY16: FY17F; FY17: FY18F Source: Thomson Reuters, *DBS Vickers Page 1

11 PE valuations, 27 to 216 trough (based on earnings forecasts) 9-May Mkt 17F 18F PE (x) Company Name Code Price HK$ Cap US$bn PE x PE x Trough 28 Trough 29 Trough 21 Trough 211 Trough 212 Trough 213 Trough 214 Trough 215 Trough 216 China Ov erseas* 688 HK Country Garden* 27 HK CR Land* 119 HK China V anke 'H'* 222 HK n.a. n.a. n.a. n.a. n.a. n.a Evergrande* 3333 HK n.a. n.a Longfor* 96 HK n.a Shimao Property* 813 HK Average Agile Property* 3383 HK China South City*^^ 1668 HK n.a. n.a COGO* 81 HK n.a. n.a. n.a China J inmao Hldgs* 817 HK Greentown 39 HK Guangzhou R&F 2777 HK Hopson Dev 754 HK KWG Property 1813 HK Logan Property 338 HK n.a. n.a. n.a. n.a. n.a. n.a Poly (Hong Kong) 119 HK Sino-Ocean Land* 3377 HK Soho China* 41 HK Sunac China 1918 HK n.a. n.a Yanlord Land*^ YLLG SP Yuexiu Property* 123 HK Average# BJ Cap Land 'H' 2868 HK BJ North Star 'H' 588 HK n.a C C Land* 1224 HK n.a. n.a Central China* 832 HK China SCE 1966 HK n.a. n.a CIFI Holdings 884 HK n.a. n.a. n.a. n.a. n.a F irst Sponsor*^ FSG SP n.a. n.a. n.a. n.a. n.a. n.a. n.a Glorious Property 845 HK.82.8 n.a. n.a. n.a Hy doo Int'l 1396 HK.65.3 n.a. n.a. n.a. n.a. n.a. n.a. n.a Kaisa Group 1638 HK n.a. n.a. n.a. n.a Lai Fung* 1125 HK n.a Minmetals Land 23 HK.92.4 n.a. n.a Modern Land (China) 117 HK n.a. n.a. n.a. n.a. n.a. n.a Powerlong 1238 HK n.a Renhe Commercial 1387 HK n.a. n.a Greenland* 337 HK n.a SRE Group 127 HK.18.5 n.a. n.a Sunshine 1 China 268 HK n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a Times Property 1233 HK n.a. n.a. n.a. n.a. n.a. n.a Wuzhou Int'l 1369 HK.79.2 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a Ying Li^ YINGLI SP.14.3 n.a. n.a. n.a Yuzhou Properties 1628 HK n.a Zhong An 672 HK.67.2 n.a. n.a Average** Average (Overall)@ ^ Denominated in SGD for price # Exclude Soho China for 16F & 17F PE ** Exclude Greenland, First Sponsor & Lai Fung for 16F & 17F Exclude Soho China, Greenland, First Sponsor & Lai Fung for 16F & 17F PE ^^ FY15: 16F; FY16: FY17F; FY17: FY18F Source: Thomson Reuters, *DBS Vickers Page 11

12 PE valuations, 27 to 216 peak (based on earnings forecasts) 9-May Mkt 17F 18F PE (x) Company Name Code Price HK$ Cap US$bn PE x PE x Peak 28 Peak 29 Peak 21 Peak 211 Peak 212 Peak 213 Peak 214 Peak 215 Peak 216 China Overseas* 688 HK Country Garden* 27 HK CR Land* 119 HK China V anke 'H'* 222 HK n.a. n.a. n.a. n.a. n.a. n.a Evergrande* 3333 HK n.a. n.a Longfor* 96 HK n.a Shimao Property* 813 HK Average Agile Property* 3383 HK China South City*^^ 1668 HK n.a. n.a COGO* 81 HK n.a. n.a. n.a China J inmao Hldgs* 817 HK Greentown 39 HK Guangzhou R&F 2777 HK Hopson Dev 754 HK KWG Property 1813 HK Logan Property 338 HK n.a. n.a. n.a. n.a. n.a. n.a Poly (Hong Kong) 119 HK Sino-Ocean Land* 3377 HK Soho China* 41 HK Sunac China 1918 HK n.a. n.a Yanlord Land*^ YLLG SP Yuexiu Property* 123 HK Average# BJ Cap Land 'H' 2868 HK BJ North Star 'H' 588 HK n.a C C Land* 1224 HK n.a. n.a. n.a Central China* 832 HK China SCE 1966 HK n.a. n.a CIFI Holdings 884 HK n.a. n.a. n.a. n.a. n.a First Sponsor*^ FSG SP n.a. n.a. n.a. n.a. n.a. n.a. n.a Glorious Property 845 HK.82.8 n.a. n.a. n.a Hydoo Int'l 1396 HK.65.3 n.a. n.a. n.a. n.a. n.a. n.a. n.a Kaisa Group 1638 HK n.a. n.a. n.a. n.a Lai Fung* 1125 HK n.a Minmetals Land 23 HK.92.4 n.a. n.a n.a Modern Land (China) 117 HK n.a. n.a. n.a. n.a. n.a. n.a Powerlong 1238 HK n.a Renhe Commercial 1387 HK n.a. n.a Greenland* 337 HK n.a SRE Group 127 HK.18.5 n.a. n.a Sunshine 1 China 268 HK n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a Times Property 1233 HK n.a. n.a. n.a. n.a. n.a. n.a Wuzhou Int'l 1369 HK.79.2 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a Ying Li^ YINGLI SP.14.3 n.a. n.a. n.a Yuzhou Properties 1628 HK n.a Zhong An 672 HK.67.2 n.a. n.a Average** Average (Overall)@ ^ Denominated in SGD for price # Exclude Soho China for 16F & 17F PE ** Exclude Greenland, First Sponsor & Lai Fung for 16F & 17F Exclude Soho China, Greenland, First Sponsor & Lai Fung for 16F & 17F PE ^^ FY15: 16F; FY16: FY17F; FY17: FY18F Source: Thomson Reuters, *DBS Vickers Page 12

13 PE valuations, 27 to 216 trough (based on reported earnings) 3-mth daily 9-May Mkt trading F Y17F F Y18F Price Cap value PE PE Avg Trough Trough Trough Trough Trough Trough Trough Trough Trough Company Name Code HK$ US$bn US$m x x PE (x) China Overseas* 688 HK Country Garden* 27 HK CR Land* 119 HK China V anke 'H'* 222 HK n.a. n.a. n.a. n.a. n.a Evergrande* 3333 HK n.a Longfor* 96 HK n.a Shimao Property* 813 HK Av erage Agile Property* 3383 HK China South City*^^ 1668 HK n.a. 6.1 n.a. n.a. n.a COGO* 81 HK (3.5) China J inmao Hldgs* 817 HK Greentown 39 HK Guangzhou R&F 2777 HK Hopson Dev 754 HK KWG Property 1813 HK Logan Property 338 HK n.a. n.a. n.a. n.a. n.a Poly (Hong Kong) 119 HK (2.5) 85.5 Sino-Ocean Land* 3377 HK Soho China* 41 HK n.a. n.a. n.a. n.a. n.a. n.a. n.a Sunac China 1918 HK n.a. n.a. n.a Yanlord Land*^ YLLG SP Yuexiu Property* 123 HK (4.6) Average# BJ Cap Land 'H' 2868 HK BJ North Star 'H' 588 HK n.a C C Land* 1224 HK n.a. n.a. n.a. n.a. n.a. n.a. n.a Central China* 832 HK China SCE 1966 HK n.a. n.a CIFI Holdings 884 HK n.a. n.a. n.a. n.a First Sponsor*^ FSG SP n.a. 2.4 n.a. n.a. n.a. n.a. n.a. n.a Glorious Property 845 HK n.a. n.a. 4.5 n.a (2.2) (1.4) (1.2) Hydoo Int'l 1396 HK n.a. n.a n.a. n.a. n.a. n.a. n.a. n.a Kaisa Group 1638 HK n.a. n.a. 3.4 n.a n.a. n.a. (11.6) Lai Fung* 1125 HK n.a Minmetals Land 23 HK n.a. n.a Modern Land (China) 117 HK n.a. n.a. n.a. n.a. n.a Powerlong 1238 HK n.a Renhe Commercial 1387 HK n.a. n.a. n.a (3.6) (3.2) (2.3) (.5) Greenland* 337 HK n.a (1.1) SRE Group 127 HK n.a. n.a (1.6) (.6) (12.9) Sunshine 1 China 268 HK n.a. n.a n.a. n.a. n.a. n.a. n.a. n.a Times Property 1233 HK n.a. n.a. n.a. n.a. n.a Wuzhou Int'l 1369 HK n.a. n.a. 1.3 n.a. n.a. n.a. n.a. n.a (5.7) 32.1 Ying Li^ YINGLI SP n.a. n.a. n.a Yuzhou Properties 1628 HK n.a Zhong An 672 HK n.a. n.a Av erage** Av erage (Ov erall)@ HSI Index HSI ^ Denominated in SGD for price # Exclude Soho China for 16F & 17F PE ** Exclude Greenland, First Sponsor & Lai Fung for 16F & 17F Exclude Soho China, Greenland, First Sponsor & Lai Fung for 16F & 17F PE ^^ FY15: 16F; FY16: FY17F; FY17: FY18F Source: Thomson Reuters, *DBS Vickers Page 13

14 PE valuations, 27 to 216 peak (based on reported earnings) 3-mth daily 9-May Mkt trading F Y17F F Y18F Price Cap v alue PE PE A v g Peak Peak Peak Peak Peak Peak Peak Peak Peak Company Name Code HK$ US$bn US$m x x PE (x) China Overseas* 688 HK Country Garden* 27 HK CR Land* 119 HK China V anke 'H'* 222 HK n.a. n.a. n.a. n.a. n.a Evergrande* 3333 HK n.a Longfor* 96 HK n.a Shimao Property* 813 HK Average Agile Property* 3383 HK China South City*^^ 1668 HK n.a. 6.1 n.a. n.a. n.a COGO* 81 HK n.a China J inmao Hldgs* 817 HK Greentown 39 HK Guangzhou R&F 2777 HK Hopson Dev 754 HK KWG Property 1813 HK n.a Logan Property 338 HK n.a. n.a. n.a. n.a. n.a Poly (Hong Kong) 119 HK (6.8) Sino-Ocean Land* 3377 HK Soho China* 41 HK n.a Sunac China 1918 HK n.a. n.a. n.a Yanlord Land*^ YLLG SP Yuexiu Property * 123 HK n.a Average# BJ Cap Land 'H' 2868 HK BJ North Star 'H' 588 HK n.a C C Land* 1224 HK n.a. n.a Central China* 832 HK China SCE 1966 HK n.a. n.a CIFI Holdings 884 HK n.a. n.a. n.a. n.a F irst Sponsor*^ FSG SP n.a. 2.4 n.a. n.a. n.a. n.a. n.a. n.a Glorious Property 845 HK n.a. n.a. 4.5 n.a (3.8) (2.3) (2.3) Hydoo Int'l 1396 HK n.a. n.a n.a. n.a. n.a. n.a. n.a. n.a Kaisa Group 1638 HK n.a. n.a. 3.4 n.a n.a. n.a. (11.6) Lai Fung* 1125 HK n.a Minmetals Land 23 HK n.a. n.a Modern Land (China) 117 HK n.a. n.a. n.a. n.a. n.a Powerlong 1238 HK n.a Renhe Commercial 1387 HK n.a. n.a. n.a (8.4) (5.5) (7.3) (1.) Greenland* 337 HK n.a (1.8) SRE Group 127 HK n.a. n.a (13.9) (2.7) (24.3) Sunshine 1 China 268 HK n.a. n.a n.a. n.a. n.a. n.a. n.a. n.a Times Property 1233 HK n.a. n.a. n.a. n.a. n.a Wuzhou Int'l 1369 HK n.a. n.a. 1.3 n.a. n.a. n.a. n.a. n.a (15.) 35.8 Ying Li^ YINGLI SP n.a. n.a. n.a Yuzhou Properties 1628 HK n.a Zhong An 672 HK n.a. n.a Average** Average (Overall)@ HSI Index HSI ^ Denominated in SGD for price # Exclude Soho China for 16F & 17F PE ** Exclude Greenland, First Sponsor & Lai Fung for 16F & 17F Exclude Soho China, Greenland, First Sponsor & Lai Fung for 16F & 17F PE ^^ FY15: 16F; FY16: FY17F; FY17: FY18F Source: Thomson Reuters, *DBS Vickers Page 14

15 Share price performance Price Performance 27 1-wk 2-wk 1-mth 2-mth 3-mth 4-mth 5-mth 6-mth YTD 1-yr high % % % % % % % % % % % % % % % % Tier 1 players China Overseas 688 HK (1.8) (3.9) (3.9) (8.1) (1.) 1.8 (2.) (6.6) 7.3 (2.6) 78. (5.6) (24.4) 17.5 Country Garden 27 HK.5 (3.8) (32.8) (41.9) CR Land 119 HK (2.8) (6.8) (7.2) (.2) (5.1) (8.9) (22.8) (.3) China Vanke 'H' 222 HK.5 (4.6) (7.7) (5.5) (2.7) 9.7 (7.5) (3.7) n.a. n.a. n.a (22.7) n.a. Evergrande 3333 HK (3.6) (15.6) (5.3) (3.4) (29.2) n.a. Longfor Properties 96 HK (2.5) (4.3) (3.3) (28.6) (7.8) 15.7 (14.9) n.a. Shimao Property 813 HK (2.9) (6.9) (6.9) (3.4) (2.7) (2.5) (26.4) (58.5) Average (1.8) (6.6) (4.7) (6.1) (4.2) 26.2 (14.9) (2.8) Tier 2 players Agile Property 3383 HK (3.6) (8.1) (5.6) (23.8) (46.9) (2.) (8.6) (66.4) China South City 1668 HK (3.2) (.7) (4.5) (6.8) (1.2) (6.8) (13.3) (7.4) (7.4) (5.6) (7.4) n.a. COGO 81 HK (3.6) (1.) (7.1) (2.7) (46.7) (16.8) (22.9) (17.) China Jinmao Hldgs 817 HK (7.1) (1.2) (7.4) (2.5) (6.) (3.2) (17.4) 19.4 (21.1) (62.) Greentown 39 HK (4.3) (5.2) (6.8) (4.2) (16.6) (35.). (18.4) (63.4) GZ R&F 2777 HK (5.9) (11.) (6.9) (12.1) (16.3).6 (1.8) (72.1) Hopson Dev 754 HK (4.7) (4.6) (4.).7 (2.9) (3.5) 27.2 (24.6) (24.) 8.7 (1.5) (77.2) KWG 1813 HK (4.5) (7.4) (4.) (26.1) (17.8) (56.4) Logan Property 338 HK (1.8) (5.2) (.9) n.a. n.a n.a. Poly HK 119 HK (4.6) (1.4) (9.6) (14.1) (13.4) (31.7) (22.9) (2.7) 1.6 (74.5) Sino-Ocean 3377 HK (4.7) (6.7) (5.) (1.8) (.5) (12.1) (13.4) 12.7 (3.2) (75.7) SOHO China 41 HK (1.2) (2.3) (.5) (18.) (31.4) 1.6 (64.9) Sunac China 1918 HK 2.1 (4.6) (1.9) (22.5) 69.7 (24.) 7.5 n.a. Yanlord Land YLLG SP (4.3) 3. (2.6) (19.4) (15.1) (3.4) 31.3 (55.3) Yuexiu Property 123 HK (6.1) (8.2) (7.5) (5.4) (22.) (16.8) (1.1) (2.9) (57.3) Average (3.4) (5.7) (5.1) (11.1) (8.5) (.9) (8.4) (62.9) Tier 3 players BJ Cap. Land 2868 HK (1.3) (1.5) (8.4) (2.9) (18.) (18.) (54.4) BJ North Star 588 HK (.3).7 (6.8) (16.7) (7.) (61.6) C C Land 1224 HK (4.) (5.) (6.4) (14.6) (19.3) (15.4) (12.3) (6.8) (14.3) (6.4) 88.9 (28.3) (3.7) 79.2 (6.6) (88.4) Central China 832 HK (3.2) (6.1) (4.2) (12.8) (26.8) (7.4) 4.3 n.a. China SCE Property 1966 HK (2.4) (4.) (3.4) (2.7) (12.4) n.a. CIFI Holdings 884 HK (1.5) (6.6) (9.7) (6.6) n.a (6.1) n.a. First Sponsor FSG SP (1.9). (.4) (.7). (.4). 2.7 (.7) 1.4 n.a. n.a. n.a n.a. Glorious Property 845 HK (9.9) (9.9) (9.9) (9.9) (3.5) 7.9 (1.2) (28.1) (25.) (15.6) n.a. Hydoo Int'l 1396 HK (15.6) (15.6) (4.4) (11.) (7.1) (5.8) 8.3 (14.5) 12.1 (36.9) n.a. n.a. (13.5) (44.) (46.3) n.a. Kaisa Group 1638 HK (.4) (2.1) (16.1) (36.4) (1.9). n.a. Lai Fung 1125 HK (5.3) (19.9) (17.2) 23.8 (53.5) Minmetals Land 23 HK (3.2) (5.2) (8.) (3.2) (3.2) (2.1) (8.) (4.2) (1.1) (19.5) (13.6) (75.2) Modern Land (China) 117 HK (1.6) (3.1) (7.4) (1.6) (16.1) n.a. n.a (53.2) n.a. Powerlong 1238 HK (4.1) (2.5) (34.3) n.a. Renhe Commercial 1387 HK (1.) (4.3) (2.9) (3.4) (6.2) 2.1 (.5) (18.5) (8.9) (38.9) (28.1) 5.9 (44.7) n.a. Greenland 337 HK (7.1) (.4) (18.3) (1.9) (36.1) (65.1) SRE Group 127 HK (2.1) (3.7) (6.1) (5.6) (9.4) (6.6) (7.1) (15.2) (7.5) (24.) 24.2 (32.9) (2.8) 73.8 (45.5) (94.6) Sunshine 1 China 268 HK (5.9) (8.6) (5.6) (13.5) (5.3) n.a. n.a. n.a n.a. Times Property 1233 HK (4.8) (6.9) (8.8) (.8) n.a. n.a. (5.7) (18.2) 4.4 n.a. Wuzhou Int'l 1369 HK. (1.3) (3.7) (1.3) 1.3 (4.8) n.a. n.a. 14. (44.9) (3.7) n.a. Ying Li YINGLI SP (1.4). (9.6) (1.7) (13.9) (12.3) (9.6) (15.5) (4.7) (38.) (32.2) (1.2) (88.2) Yuzhou Properties 1628 HK (1.1) (2.3) n.a. Zhong An 672 HK (6.9) 4.7 (4.3) (2.8) (28.9) (21.) (88.4) Average (2.4) (3.3) (4.) (13.5) 6.9 (4.5) (7.3) Average (Overall) (2.7) (4.6) (4.5) (4.9) (1.4) 6.9 (7.4) (59.6) Hang Seng Index (7.2).4 (21.3) MSCI China (1.) (1.) (1.1) (1.4) (34.9) Source: Thomson Reuters Page 15

16 Historical valuations NAV discount / (premium) (%) PE (x) PB (x) 9-May Company name Code Price HK$ Current Hist av g + 1 s.d. - 1 s.d. Current (FY17) Hist av g + 1 s.d. - 1 s.d. Current Hist av g + 1 s.d. - 1 s.d. Agile Property 3383 HK C C Land 1224 HK (14.5) (1.4) Central China 832 HK China Overseas 688 HK (2.5) China V anke-h 222 HK China V anke-a* 2 CH (1.8) (34.6) COGO 81 HK (2.9) Country Garden 27 HK (3.8) CR Land 119 HK China Evergrande 3333 HK 7.81 (1.7) F irst Sponsor F SG SP n.a. n.a. n.a (1.4) China J inmao 817 HK Longfor 96 HK Shimao Property 813 HK Sino-Ocean Land 3377 HK SOHO China 41 HK (1.8) Greenland 337 HK Yanlord Land^ YLLG SP Yuexiu Property 123 HK Sector average 46.3** 46.2~ 39.6~ 52.8~ ~ 7.7~ 5.6~.8.8~.9~.6~ ^ Share price denominated in SGD ** Exclude Soho China, Greenland, First Sponsor & Lai Fung ~ 21-YTD Source: Thomson Reuters, DBS Vickers Page 16

17 DBSVHK recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>2% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >1% for large caps) HOLD (-1% to +15% total return over the next 12 months for small caps, -1% to +1% for large caps) FULLY VALUED (negative total return i.e. > -1% over the next 12 months) SELL (negative total return of > -2% over the next 3 months, with identifiable catalysts within this time frame) Share price appreciation + dividends Completed Date: 9 May :2:56 (HKT) Dissemination Date: 9 May :9:44 (HKT) Sources for all charts and tables are DBS Vickers unless otherwise specified. GENERAL DISCLOSURE/DISCLAIMER This report is prepared by DBS Vickers (Hong Kong) Limited ( DBSVHK ). This report is solely intended for the clients of DBS Bank Ltd., DBS Vickers Securities (Singapore) Pte Ltd. ( DBSVS ) and DBSVHK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVHK. The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS Bank Ltd., DBSVS and DBSVHK, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the DBS Group )) have not conducted due diligence on any of the companies, verified any information or sources or taken into account any other factors which we may consider to be relevant or appropriate in preparing the research. Accordingly, we do not make any representation or warranty as to the accuracy, completeness or correctness of the research set out in this report. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group, may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies. Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed, it may not contain all material information concerning the company (or companies) referred to in this report and the DBS Group is under no obligation to update the information in this report. This publication has not been reviewed or authorized by any regulatory authority in Singapore, Hong Kong or elsewhere. There is no planned schedule or frequency for updating research publication relating to any issuer. The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that: (a) (b) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein. Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report. DBSVUSA, a US-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in marketmaking. Page 17

18 ANALYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s) primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate 1 does not serve as an officer of the issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or his associate does not have financial interests 2 in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately. There is no direct link of DBS Group's compensation to any specific investment banking function of the DBS Group. COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBSVHK and its subsidiaries do not have a proprietary position in the securities recommended/mentioned in this report as of 8 May Neither DBS Bank Ltd, DBS HK nor DBSV HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research Report. 3. Compensation for investment banking services: DBS Bank Ltd., DBSVS, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA have received compensation, within the past 12 months for investment banking services from China South City Holdings Limited (1668 HK), China Overseas Grand Oceans Group (81 HK), China Jinmao Holdings (817 HK), Yanlord Land Group Limited (YLLG SP), Yuexiu Property Company Limited (123 HK) and Central China Real Estate Limited (832 HK) as of 31 Mar 217. DBS Bank Ltd., DBSVS, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA have managed or co-managed a public offering of securities for China South City Holdings Limited (1668 HK), China Jinmao Holdings (817 HK), Yanlord Land Group Limited (YLLG SP) and Yuexiu Property Company Limited (123 HK) in the past 12 months, as of 31 Mar 217. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively. 4. Disclosure of previous investment recommendation produced: DBS Bank Ltd, DBSVS, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA may have published other investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by DBS Bank Ltd, DBSVHK, their subsidiaries and/or other affiliates of DBSVUSA in the preceding 12 months. 1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst. 2 Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at arm's length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant. Page 18